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to buying a ticket for an individual seat from a commercial air- priced at about a 40% discount to those with a 1-h departure
line, but there is no fixed flight schedule. The price may depend window in the same market. The latter was assumed to be
on the number of other passengers actually on board the flight, similar to the prices that would be charged for renting the en-
or it could be pre-determined based on the average number of tire aircraft (along the lines of a more traditional charter or
passengers the operator expects. There may also be other pric- air taxi service).
ing structure variations such as offering a lower pre-determined For the 2012 baseline forecast, it was assumed that the VLJ
price if the passenger is willing to travel any time within some mode would be offered with per-seat pricing (and the asso-
pre-defined time window. ciated 40% discount) in the following FAA regions: South-
These service models have initially sprung up primarily east, Southwest, and Western Pacific. Notionally, these are
in the Southeast and Northeast sections of the country, consistent with prospects for viable per-seat operations that
although similar operations have been planned (and some are were found via interviews and discussions with various in-
already operating) in the Midwest and on the West Coast. dustry participants, but it should be noted that the implicit as-
Some are using small, efficient, next-generation piston-based sumption is that all VLJ service offers in these regions are via
aircraft while others have taken deliveries of small numbers the per-seat model and none are with the traditional charter
of VLJs. model.
Despite the 2008 bankruptcy of DayJet, which was a pioneer It was assumed that per-seat pricing would also entail wait
in the development and offering of per-seat on-demand ser- time equivalent to commercial service that offered approxi-
vices, current plans from other startups appear to indicate that mately four flights per day; this was valued using the same
many still believe that the concept of the per-seat business time-between-departure coefficient that applies to commer-
model can be viable. cial air travel. Thus, the benefit of a lower price is partially off-
It is useful to consider these operators and their service set by the wait time that one must incur relative to traditional
plans in order to make reasonable assumptions about how charter service.
such service offers may spread throughout the United States In all other regions, it was assumed that the VLJ mode
for the 5- and 10-year forecasts. Careful consideration has would be available by 2012, but only via traditional charter
been given to the pricing approaches, geographic location, (per aircraft) with the associated higher cost. For the 2017
and fleet types of such operators in the consideration of how forecast, it was assumed that per-seat pricing would spread to
to model a new "VLJ" mode that will be added to the choices the Great Lakes region. Overall, in light of the recent down-
available to consumers. turn in the economy and bankruptcies in the market, these
baseline assumptions of VLJ availability by 2012 and 2017 may
be relatively optimistic.
VLJ Mode Attributes
The new VLJ mode was represented by taking an average
Spread and Distribution
of the estimated operating cost and capacity attributes of sev-
of Low-Cost Piston Services
eral models. In addition, the VLJ mode was assumed to in-
herit the same alternative-specific constant, cost, and airport The analysis also takes account of the likelihood that low-
jet presence coefficients as the air taxi light jet mode. As with cost piston air taxi services using efficient new-generation
the other air taxi services, cost to the traveler was estimated aircraft will expand beyond current service areas centered in
using a 75% markup to the aircraft operating costs estimated the Southeast region of the United States. For the baseline
in the Conklin & de Decker data. forecast, it was assumed that low-cost service would replace
higher-cost traditional piston service in the rest of the South-
east, Southwest, Western Pacific, and Great Lakes by 2012.
Spread and Distribution of VLJ Per-Seat
By 2017, it is assumed that traditional piston services are re-
versus Traditional Charter Services
placed by low-cost alternatives entirely throughout the United
It is believed that a per-seat pricing approach still could be States.
the foundation for a successful business model for VLJ air taxi
services, although the prices may need to be somewhat higher
Other Modes
than initially estimated or selection and utilization of aircraft
type may need to be altered. With the exception of the impact of fuel prices on total
To assess the potential impact of the per-seat approach to cost (see below), the attributes of the remaining modes--
air taxi services, an analysis of actual fares offered for per-seat automobile, commercial air, and air taxi turboprop and light
services in 2008 was undertaken. On average, it was found jet--were assumed to remain constant for all geographic
that per-seat prices with a 3- to 4-h departure window were regions through the forecast years 2012 and 2017.
